Telecom Italia's plan to spin off his mobile unit TIM received a negative reaction from the stock market when the group's shares returned to trading on Tuesday.
Telecom Italia opened down 1.57% while Pirelli, which controls Telecom Italia through the holding company Olimpia , fell by more than 5% and Telecom Italia's mobile unit TI Media sank 4.74% at the start of trading.
Telecom Italia shares were suspended from trading on Monday while the group's board examined and then approved a plan presented by chairman Marco Tronchetti Provera to have TIM stand alone and to expand fixed line service by offering films from Rupert Murdoch's 20th Century Fox to broadband customers.
The spin off of TIM was seen by most observers as an indication that it would be sold to offset Telecom Italia's debts of upwards of 40 billion euros.
TIM, Italy's leading mobile company, has an estimated value of between 30 and 40 billion euros. In a statement issued on Tuesday, Telecom Italia said no mandate had been given or approved to sell TIM nor had any offers been received for the mobile operator.
Unions have called a strike to protest against the group's reorganization because they fear a future sale of TIM could lead to layoffs.
According to Tronchetti Provera, splitting Telecom Italia's activities into two separate companies, at present both 100% controlled by Telecom Italia, was necessary to make the group more flexible.
